Local Development Finance Authority

CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY Approved MINUTES OF THE REGULAR MEETING March 15, 2016 – 8:00 a.m. 40555 Utica Road, Sterling Heights, MI 48313 586-884-9322 City Council Chambers Phil Hunsberger called the meeting to order at 8:04 a.m. Pledge of Allegiance Members present at roll call: Stephanie Eagen, Phillip Hunsberger, Laurel Johnson, John Lamerato, Victor Martin, Camille Silda, Jill Tomyn Members absent: David Corba, Lori Doughty, Richard Kincaid, John Lettang, Kerry Weishaupt, Orest Zachary Also in attendance: Kathryn Quell, Building Services Specialist – City of Sterling Heights; Luke Bonner, Senior Economic Development Advisor – City of Sterling Heights Motion to Approve the Agenda Moved by Silda, supported by Lamerato, to approve the agenda as presented. Ayes: All Nays: None Motion carried. Motion to Approve the Minutes of February 16, 2016 Regular Meeting Moved by Eagen, supported by Martin, to approve the minutes as presented. Ayes: All Nays: None Motion carried. New Business To acknowledge receivership of the revised Third Amended and Restated Tax Increment Finance and Development Plan and recommend approval to the Sterling Heights City Council – with administrative changes that have take place. Mr. Bonner stated that there were a couple of errors in regards to the Tax Increment Finance Plan relating to the Macomb Intermediate School District millage. Previously the millage was placed with the local capture and should be SmartZone capture. Each table is updated as of December 31, 2015. Mr. Bonner stated the value that was used was the total value of the property today and did not reflect the tax abatement for BAE Systems, Chrysler Body Shop, and Chrysler Paint Facility. Revenues should have been cut in half to reflect the tax abatement. He went on to explain that all the figures have been reviewed with the City’s treasurer to have accurate figures. Ms. Eagen asked if this revised document is going before City Council after the LDFA gives approval. She stated that if there were more changes to the document, it would need to be approved by the LDFA again. Ms. Eagen requested that the final plan that is presented to City Council be sent to the LDFA Board. Mr. Bonner agreed that he would copy the LDFA board with the City Council packet. Mr. Bonner then reviewed the following changes: Page 63 – SmartZone projection Page 65 – Updated Paint Facility capture Page 66 – School capture adding in MISD and projection. The cap of $500,000 is eliminated. In the future, the city will be looking at the relationship with the contractors in the SmartZone. Currently, we have an affiliated agreement with Oakland University and it needs to be more defined. Page 69 – Body Shop projection Page 70 – Updated school capture for the Body Shop Page 71 – Projected 15-year extension Page 72 – removed MISD millage. Page 73 – adjusted chart with school capture and Sterling Enterprise Park Page 74- 15-year extension for SmartZone Sterling Enterprise Park. Best guess – will update as project unfolds. Page 75 – combining all local capture. Total went from $33M to $24M over 20-year capture Page 76 – anticipated capture for all SmartZone capture Page 77 – combined 15-year extension Mr. Hunsberger asked if these financials should be included in the executive summary. Mr. Bonner stated that he could add them to the summary if the board wants. Mr. Hunsberger stated he is suggesting adding them. Mr. Bonner said he would. Mr. Lamerato asked if the schools receive any money from the capture. Mr. Bonner responded the local schools do but the MISD does not. Mr. Martin asked what the odds were to be granted the extension. Mr. Bonner stated 50/50. Mr. Bonner said 12 applied and 2 were granted and it would be beneficial to show a legitimate relationship with Livingston County through the manufacturing industry to show synergy. He also stated that they may not fund the entire amount. Moved by Martin, supported by Johnson to acknowledge receivership of the revised Third Amended and Restated Tax Increment Finance and Development Plan and recommend approval to the Sterling Heights City Council – with administrative changes that have taken place. Ayes: All Nays: None Motion carried. To approve the renewal Lease Agreement between Logistics Specialties, Inc. and the Local Development Finance Authority (LDFA). Ms. Quell stated that Logistics Specialties, Inc. is renewing space #3-J consisting of approximately 810 square feet at a rate of $675.00/month. The renewal is for the period April 1, 2016 thru March 31, 2017. Moved by Martin, supported by Eagen to approve the renewal Lease Agreement between Logistics Specialties, Inc. and the Local Development Finance Authority (LDFA). Ayes: All Nays: None Motion carried. To approve the renewal Lease Agreement between Kosch Food Service, Inc. and the Local Development Finance Authority (LDFA). Ms. Quell stated that Kosch Food Service, Inc. is renewing space #2-A consisting of approximately 830.5 square feet. Following the lease rate pricing model, presented at the February LDFA meeting by Larry Herriman, the lease rate for this renewal is increasing to bring all tenants in line and allow for consistency. The renewal period is May 1, 2016 thru April 30, 2017. Moved by Martin, supported by Lamerato to approve the renewal Lease Agreement between Kosch Food Service, Inc. and the Local Development Finance Authority (LDFA). Ayes: All Nays: None Motion carried. To approve the renewal Lease Agreement between The Automation of Things and the Local Development Finance Authority (LDFA). Ms. Quell stated that The Automation of Things is renewing space #3-E consisting of approximately 814 square feet. The lease rate is increasing to bring all tenants in line and allow consistency. Rates were determined by following the lease rate pricing model as presented at the February LDFA meeting by Mr. Herriman. The renewal period is April 1, 2016 thru March 31, 2017. Moved by Silda, supported by Johnson to approve the renewal Lease Agreement between The Automation of Things and the Local Development Finance Authority (LDFA). Ayes: All Nays: None Motion carried. To approve the Month-to-Month renewal Lease Agreement between Coupon Wallet, LLC and the Local Development Finance Authority (LDFA). Ms. Quell stated that Coupon Wallet, LLC is renewing space #2-I consisting of approximately 799 square feet. The lease rate is increasing to bring all tenants in line and allow consistency. Rates were determined by following the lease rate pricing model as presented at the February LDFA meeting by Mr. Herriman. The renewal commences April 1, 2016 on a month-to-month basis. Moved by Martin, supported by Eagen to approve the Month-to-Month renewal Lease Agreement between Coupon Wallet, LLC and the Local Development Finance Authority (LDFA). Ayes: All Nays: None Motion carried Old Business Board Members Report None Public Comment None Adjournment Moved by Lamerato, supported by Eagen to adjourn. Ayes: All Nays: None Motion carried. The meeting adjourned at 8:46 am Kq Minutes Approved 6/15/2016 John Lettang Secretary